IIG Capital: Difference between revisions - Wikipedia

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{{short description|American financial institution that ran a Ponzi scheme}}

{{Infobox company

| name = International Investment Group LLC

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'''International Investment Group''' ('''IIG''') is an American [[financial institution]] that specializes in [[Short-term trading|short-term trade]] finance and commercial finance with a focus on [[emerging markets]]. Through its affiliate ''IIG Capital'' it is instrumental in providingprovides financing to small and medium-sized merchants, traders and processors with a need for [[supply chain]] financing.<ref>{{Cite book | last =Blessing | first =Sona | title = Alternative Alternatives: Risk, Returns and Investment Strategy | publisher=Wiley Finance | year =2011 | page =125 | isbn = 978-0470683965}}</ref>

David Hu (胡大韦 ''Hu Dawei''), cofounder of IIG Capital, served as its [[chief investment officer]] (CIO). In April 2022, Hu was sentenced to 12 years in prison for running a [[Ponzi scheme]], [[defrauding]] and scamming customers of more than $120 million. Moreover, Hu fabricated documents to hide his financial losses.<ref name=":0">{{Cite news |last=Dolmetsch |first=Chris |date=2022-04-11 |title=Investment Chief Gets 12 Years for Running $100 Million Scam |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2022-04-11/investment-chief-gets-12-years-for-running-100-million-scam |access-date=2023-03-06}}</ref><ref name=":2" /><ref name=":4">{{Cite web |title=NY Fund Manager Gets 13 Months for $100 Million Ponzi Fraud (1) |url=https://news.bloomberglaw.com/white-collar-and-criminal-law/fund-manager-gets-13-months-for-100-million-ponzi-scheme-theft |access-date=2023-03-06 |website=news.bloomberglaw.com |language=en}}</ref> Hu's partner Martin Silver was also found guilty of running the Ponzi scheme.<ref name=":0" /><ref name=":2">{{Cite web |date=2022-04-11 |title=Former Managing Partner Of Manhattan Investment Advisory Firm Sentenced To 12 Years For Defrauding Investors In An Over $120 Million Ponzi-Like Scheme |url=https://www.justice.gov/usao-sdny/pr/former-managing-partner-manhattan-investment-advisory-firm-sentenced-12-years |access-date=2023-03-06 |website=www.justice.gov |language=en}}</ref><ref>{{Cite news |title=Investment Chief Gets 12 Years for Running $100 Million Scam |language=en-US |work=Washington Post |url=https://www.washingtonpost.com/business/on-small-business/investment-chief-gets-12-years-for-running-100-million-scam/2022/04/11/a7bdb1da-b9c0-11ec-a92d-c763de818c21_story.html |access-date=2023-03-06 |issn=0190-8286}}</ref><ref name=":1">{{Cite web |last=Berman |first=Jeff |title=Ex-Head of RIA Sentenced to 12 Years in Prison Over $120M Scam |url=https://www.thinkadvisor.com/2022/04/14/ex-head-of-ria-sentenced-to-12-years-in-prison-over-120m-ponzi-like-scheme/ |access-date=2023-03-06 |website=ThinkAdvisor |language=en}}</ref>

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== Founders ==

The company was confounded by David Hu and Martin Silver. Later David Hu was sentenced to 12 years in prison for running a scam and defrauding customers of over $120 million.<ref name=":10">{{Cite news |date=2022-04-11 |title=Investment Chief Gets 12 Years for Running $100 Million Scam |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2022-04-11/investment-chief-gets-12-years-for-running-100-million-scam |access-date=2023-03-06}}</ref><ref name=":11">{{Cite web |last=Berman |first=Jeff |title=Ex-Head of RIA Sentenced to 12 Years in Prison Over $120M Scam |url=https://www.thinkadvisor.com/2022/04/14/ex-head-of-ria-sentenced-to-12-years-in-prison-over-120m-ponzi-like-scheme/ |access-date=2023-03-06 |website=ThinkAdvisor |language=en}}</ref> Hu served as its CIO and managing partner and held a 50% stake in IIG. Hu's main role was giving financial advice to clients while investing on their behalf.<ref name=":12">{{Cite web |last=Berger |first=Marc P. |last2=Wadhwa |first2=Sanjay |last3=Pollock |first3=Sheldon L. |last4=Michael |first4=Daniel |last5=Nawaz |first5=Osman |last6=Fortino |first6=Philip A. |last7=Moilanen |first7=Lindsay S. |title=SECURITIES AND EXCHANGE COMMISSION, Plaintiff against DAVID HU, Defendant. |url=https://www.sec.gov/litigation/complaints/2020/comp-pr2020-157.pdf}}</ref>

From 1982 to 1987, Hu started his career at [[Mellon Financial|Mellon Bank]]. He then worked at [[American Express]] trading debt from the [[Latin American debt crisis]] (LDC debt). From 1991 to 1993, David Hu worked at [[Nomura Securities|Nomura Securities International]]. From 1993 to 1994, Hu worked at [[Smith Barney]] (now part of [[Morgan Stanley]]). From March 1997 to February 2012, Hu worked at IIG Horizons Securities.<ref name=":12" /> While at Nomura and Smith-Barney, Hu worked as a trader and managing director specializing in [[fixed income]], [[emerging markets]], and [[underwriting]].<ref name=":13">{{Cite web |date=2015-03-13 |title=IIG Capital, LLC - David Hu |url=http://iigcapital.com/our-team/managing-partners/david-hu.html |archive-url=https://web.archive.org/web/20150313131637/http://iigcapital.com/our-team/managing-partners/david-hu.html |url-status=dead |archive-date=2015-03-13 |access-date=2023-04-19 }}</ref>

David Hu previously worked at IIG Horizons Securities, [[Smith Barney]] (now part of [[Morgan Stanley]]).<ref>{{Cite web |first=Marc P. Berger Sanjay Wadhwa Sheldon L. Pollock Daniel Michael Osman Nawaz Philip A. Fortino Lindsay S. Moilanen |title=SECURITIES AND EXCHANGE COMMISSION, Plaintiff against DAVID HU, Defendant. |url=https://www.sec.gov/litigation/complaints/2020/comp-pr2020-157.pdf}}</ref>

Hu held securities licenses (Series 7, 24, 63) while working at these broker-dealers.<ref name=":12" />

Later David Hu was sentenced to 12 years in prison for running a scam and defrauding customers of over $120 million.<ref name=":10" /><ref name=":11" />

=== Personal life ===

Hu was 64 years old at the time of his sentencing in 2022. Hu lived in [[West Orange, New Jersey]], with his wife and two children.<ref name=":0" /><ref name=":9" /> Hu could speak [[Mandarin Chinese]], [[Cantonese]], [[Spanish language|Spanish]], and [[English language|English]]. Hu obtained his MBA from the [[Thunderbird School of Global Management]] (Arizona) and his [[bachelor's degree]] in civil engineering from [[Universidad de San Carlos de Guatemala]].<ref name=":13" />

== Background ==

The company is headquartered in [[New York City]] and has representatives around the world.,<ref>{{Cite book | last =Marks | first =Kenneth H. | title =The Handbook of Financing Growth: Strategies, Capital Structure, and M&A Transactions | publisher =Wiley | year =2009 | pages =356–358 | url =http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470390158.htm | isbn =978-0470390153 }}{{Dead link|date=May 2019 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> It servesserving clients internationally.<ref>{{cite web|last =Schaap | first =Paula|title= Trade Finance Firm Sees Opportunities from G20 Meeting |url= http://news.hedgefund.net/default.aspx?story=9956|work= HedgeFund.net|access-date=March 19, 2011|date=April 2009}}{{dead link|date=August 2015}}</ref> The company primarily focuses on facilitating the financing of trade transactions involving commodities that can be hedged and liquidated easily.<ref>{{Cite news| last =Rocchi | first =Cate|title=A Safe Bet|url= http://www.hedgefundsreview.com/hedge-funds-review/feature/1552950/a-safe-bet|date=June 2001|work=Hedge Funds Review|access-date= March 19, 2011}}{{subscription required}}</ref> These transactions are often between sellers in emerging markets and large companies in developed markets. The company uses a structure it developed called “transactional equity,” in which the firm helps fund the down payment required from a merchant seeking financing from a bank. This enables the merchant to qualify for the [[bank financing]].<ref>{{Cite book | last =Marks | first =Kenneth H. | title = The Handbook of Financing Growth: Strategies, Capital Structure, and M&A Transactions | publisher=Wiley | year =2009 | page =113 | url = http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470390158.html | isbn = 978-0470390153}}</ref>

Another of its affiliates ''IIG Bank Malta'', provides private banking, wealth management, corporate banking and [[trade finance]] in [[Malta]].<ref>{{cite web |url=https://www.iigbank-malta.com/page/about-iig |title=Welcome to IIG Bank |access-date=June 8, 2017 |publisher=IIG Bank}}</ref>